HomeMy WebLinkAboutFIN-2023-127 - 2022 Year End VarianceStaff Report
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Financia( Services Department www.kitchener.ca
REPORT TO: Committee of the Whole
DATE OF MEETING: March 20, 2023
SUBMITTED BY: Ryan Hagey, Director of Financial Planning 519-741-2200 x 7353
PREPARED BY: Debbie Andrade, Manager of Budgets, 519-741-2200 ext. 7114
WARD(S) INVOLVED: All
DATE OF REPORT: March 1, 2023
REPORT NO.: FIN -2023-127
SUBJECT: 2022 Year End Variance
RECOMMENDATION:
For information.
REPORT HIGHLIGHTS:
• The purpose of this report is to provide the yearend financial results for City operations
• Tax Supported Operations ended the year with a surplus of $1,235,000
• Enterprise Operations ended the year with a surplus of $6,038,000
• Deficits in the Golf and Parking Enterprise Operations were fully offset by Safe Restart
funding provided by the Federal and Provincial governments in 2020, 2021, and 2022.
• This report supports the delivery of core services.
BACKGROUND:
This is the third and final formal variance report to Council regarding the City's financial
performance versus the 2022 budget. The report and attached schedules include information
regarding:
• Tax supported operating
• Rate supported enterprises/utilities, and
• Supplementary information related to investment income
REPORT:
The City's tax -supported operations ended the year with a surplus of $1,235,000. The major
contributors to the overall positive variance are the surpluses in Investment Income, Penalties
and Interest, Supplementary Taxes/Write-Offs, Facilities Management, Engineering, Planning
and Gapping Savings. These positive variances are offset in part by deficits in Sport, Parks and
Cemeteries, Corporate Communications and Emergency Operations Centre. As COVID-19
related restrictions carried into 2022 causing facility closures and reduced programming these
areas continued to be impacted for the first half of 2022 with considerable losses in income for
room rentals, admissions, and registration fees. Furthermore, on May 21, 2022 the City was
*** This information is available in accessible formats upon request. ***
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Page 109 of 137
impacted by the severe windstorm which occurred across Ontario causing damage and requiring
additional cleanup costs primarily in the Forestry section of Parks and Cemeteries.
More details about each of the City's tax supported divisions are provided in the report below
and in Schedule 1.
The rate supported operations were also impacted by COVID-19 restrictions which continued
to be in place for the early part of 2022, with Parking and Golf being the most severely hit.
Parking revenues were down significantly lower than budget due to reduced monthly and
hourly parking demands related to new hybrid working environments, and Golf had increased
expenses due to unexpected food and beverage equipment expenses from the restart of a
lengthy COVID-19 shut down.
More details about each of the City's enterprises are provided in the report below and in
Schedules 2-8.
In 2020 and 2021 the City received Safe Restart Funding from the Federal government and
COVID-19 Recovery Funding from the Provincial government as part of their COVID-19 relief
plan to support Ontario municipalities in dealing with the ongoing impacts of the pandemic. The
total Safe Restart and COVID-19 Recovery Funding carried over from 2021 was sufficient to
fund the 2022 deficits in the Parking enterprise ($1.97M) and the Golf enterprise ($464k). A
balance of $703k remains and will carry over to help the City deal with any negative financial
impacts of COVID-19 that extend into future years.
The table below shows the amount of Safe Restart funding received, how it was applied, and
the amount remaining to be employed in future years.
Safe Restart Funding Balance
Page 110 of 137
2020
ActuaIY2021
Actual
2022 Actual
Total
Funding Received
Federal Funding
$
13,062,000
$
2,512,000
$ -
$ 15,574,000
Provincial Funding
$
-
$
4,821,933
$ -
$ 4,821,933
Total Funding Received
$ 13,062,000
$ 7,333,933
$ -
$20,395,933
Funding Allocated
Tax
$
5,062,000
$
4,651,260
$ -
$ 9,713,260
Parking
$
2,263,000
$
3,060,435
$ 1,967,774
$ 7,291,209
Golf
$
596,000
$
509,138
$ 464,092
$ 1,569,230
Utilities
$
1,119,000
$
-
$ -
$ 1,119,000
Total Funding Allocated
$
9,040,000
$ 8,220,833
$ 2,431,866
$19,692,699
Total Funding Remaining
$ 703,234
Page 110 of 137
Operating Fund — Tax Base (Schedule 1)
The City ended the year with an operating surplus of $1.23M in tax -supported operations. This
result is 0.63% of budgeted expenditures totaling $197.2M. The surplus experienced in 2022
shows a positive outlook from the challenges the City faced in 2020 and 2021 with the
economic realities of COVID-19 which led the City into significant deficits as shown in the table
below.
Tax Supported Operations — Yearend Position
Surplus/
(Deficit) $0.98M 0.94M $1.42M $1.73M $0.77M ($5.06M) ($4.65M) $1.23M
Significant variances (over $200,000) are summarized below by division. Schedule 1 provides
additional detail by including information for variances that exceed $100,000 of the budget.
Significant Variances (over $200,000)
Community Services Department:
• Sport had a deficit of $2,761,000 due to reduced revenues as programs and rentals
were negatively impacted by the COVID-19 restrictions in early 2022.
Financial Services Department:
• Revenue had a surplus of $321,000 due to higher than expected fee revenues.
Corporate Services Department:
• Corporate Communications had a deficit of $316,000 due to a substantial decline in
advertising and sponsorship revenues.
Development Services Department:
• Planning had a surplus of $404,000 due to higher than anticipated revenues for Site
Plans.
• Engineering had a surplus of $666,000 due to higher than anticipated revenues for Site
Plans and service charges.
Infrastructure Services Department:
• Facilities Management had a surplus of $974,000 due to reduced utility consumption as
a number of City facilities were operating at reduced capacity due to COVID-19
restrictions in early 2022. This resulted in significantly lower than budgeted utility costs.
• Parks and Cemeteries had a deficit of $1,739,000 due to a significant winter activity and
major windstorm event in May which was partially funded by the Weather Stabilization
Reserve. Also there was increased operating costs associated with downtown
operations and an increased demand for playground equipment maintenance in 2022.
Page 111 of 137
General Expense:
Gapping had a surplus of $1,192,000 due to staff savings related to regular vacancies in
addition to COVID-19 as a number of staff whose facilities or programs were suspended
during the pandemic were put on designated emergency leave (DEL) or infectious
disease emergency leave (IDEL) allowing them to take advantage of various income
support programs offered by the Federal government such as the Canada Emergency
Response Benefit (CERB).
• Emergency Operations Centre had a deficit of $813,000 due to the COVID-19
pandemic. Example of costs include:
o Purchases of personal protective equipment and other health & safety supplies
o Staff costs related to managing the City's COVID-19 response
o Additional cleaning and minor retrofits of City facilities
General Revenues:
• Supplementary Taxes/Write-offs had a surplus of $607,000 due to reduced appeals as
a result of the delay in MPAC reassessments.
Other Revenues:
• Investment Income had a surplus of $709,000 due to rapid Bank of Canada rate
increases since March 2022.
• Penalties and Interest had a surplus of $1,252,000 due to an increase in overall
property tax receivable balances.
Enterprises — (Schedules 2 to 8)
Enterprises as a whole ended the year with a surplus of $6,038,000, with surpluses in Water,
Sanitary Sewer, and Natural Gas. Offsetting these positive results were deficits in Building, Golf,
Parking and Storm. Summary information about each enterprise is noted below, with more
detailed information provided in the schedules attached to this report.
Building Enterprise (Schedule 2)
Building
($1,136)
(z�"I ,43Z)
,P/ -vu
The Building Enterprise had a deficit of $1,136,000, which was $296,000 better than budgeted.
The main reason for the deficit is that revenues were lower than budget due to a decline in the
number of new construction builds as multiple interest rate increases slowed the sales of
residential buildings. The decrease in revenue was partially offset by reduced expenses due to
staff vacancies.
Page 112 of 137
Golf Enterprise (Schedule 3)
uvir ll -p i )
The Golf Enterprise had a deficit of $464,000, which was $1,000 worse than budgeted. Safe
Restart funding was used to fully offset the deficit which was caused mostly by unexpected
food and beverage equipment expenses from the restart of a lengthy COVID-19 shut down.
Parking Enterprise (Schedule 4)
The Parking Enterprise had a deficit of $1,968,000, which was $975,000 worse than budgeted.
Safe Restart funding was used to fully offset the deficit which was caused mostly by reduced
revenues. Parking revenues were significantly lower than budget due to reduced monthly and
hourly parking demands related to new hybrid working environments.
Water Utility (Schedule 5)
The Water Utility had a surplus of $695,000 which was $1,234,000 better than budgeted.
Water revenues were significantly better than budgeted due to increased volume sales
throughout the year as well as water supply higher than budget due to increased purchase
volumes from the Region, consistent with the increase in sales. Additionally, administration
expense was lower than budget due to higher allocation of costs to capital. Water maintenance
costs were higher than budget due to increased number of main breaks, as well as, increased
severity and cost of repairs and restoration.
Page 113 of 137
Sanitary Sewer Utility (Schedule 6)
Sanitary Sewer
$7,785 ($63) $7,848
The Sanitary Sewer Utility had a surplus of $7,785,000 which was $7,848,000 better than
budgeted. Sewer surcharge revenues were significantly better than budgeted, which is
consistent with increased volume sales noted in the Water utility. Additionally, other revenue
was higher than budget due to increased cross border billing volumes. Sewage processing
costs were less than budgeted due to decreased volumes arising from a dry spring and
summer. Maintenance costs were also lower than budget due to savings in main and lateral
repairs.
Stormwater Utility (Schedule 7)
Stormwater 1 ($11) ' $101 1 ($112)
The Stormwater Utility had a deficit of $11,000 which was $112,000 worse than budget.
Stormwater fees were higher than budget as a result of higher than expected development in
the year, but other revenues were lower. Additionally, administration expenses were higher
than budget due to additional development review costs.
Gas Utility (Schedule 8)
Gas Utility (Total)
Gas Delivery
$1,137
($1,227)
($3,636)
($1,894)
$4,773
$667
Gas Supply
$2,364
($1,742)
$4,106
The Gas Utility (Total) had a surplus of $1,137,000 which was $4,773,000 better than
budgeted. Gas Delivery had a favourable variance due to higher than anticipated sales
revenues from increased gas consumption from the cold winter and higher than anticipated
rental revenues and recoveries from warranty items. The higher than anticipated revenues
were offset in part by additional maintenance costs and increased depreciation. Gas Supply
had a favourable variance as sales revenues were higher than budget due to increased gas
consumption from the cold winter.
Investment Report (Schedule 9)
Page 114 of 137
All investments were made in accordance with the City's investment policy. Short-term
investment yields to date averaged 2.58%, and were well above the average interest rate of
1.32% for all of 2021.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
Final results for tax supported operations and rate supported enterprises/utilities have been
closed out to the appropriate stabilization reserves. Surpluses increase the funds available in
the reserve to offset future deficits, while deficits decrease funds available to deal with
unanticipated funding needs.
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in advance of the
council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
• FIN -2022-414 June 2022 Operating Variance Report
• FIN -2022-484 September 2022 Operating Variance Report
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services.
ATTACHMENTS:
• Schedule 1:
Statement of Operations
— Tax Supported Services
• Schedule 2:
Statement of Operations
— Building
• Schedule 3:
Statement of Operations
— Golf
• Schedule 4:
Statement of Operations
— Parking
• Schedule 5:
Statement of Operations
— Water
• Schedule 6:
Statement of Operations
— Sanitary Sewer
• Schedule 7:
Statement of Operations
— Stormwater
• Schedule 8:
Statement of Operations
— Gas
• Schedule 9:
Investment Report
Page 115 of 137
Schedule 1
Page 1 of 2
City of Kitchener
Statement of Operations
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended December 31, 2021)
2021
2022
2022
2022
2022
Actual
Actual
Annual
Surplus/
YTD %
Budget
(Deficit)
Variance
Comments
CHIEF ADMINISTRATOR'S OFFICE
CAO ADMINISTRATION
1,116,743
1,159,714
1,176,251
16,537
1.4%
CHIEF ADMINISTRATOR'S OFFICE TOTAL
1,116,743
1,159,714
1,176,251
16,537
1.4%
COMMUNITY SERVICES DEPARTMENT
COMMUNITY SERVICES ADMINISTRATION
662,900
705,254
710,077
4,823
0.7%
BY-LAW ENFORCEMENT
2,803,015
2,405,995
2,526,368
120,373
4.8%
Surplus due to higherthan anticipated MTO Defaulted Fine Revenues.
CORPORATE CUSTOMER SERVICE
471,972
564,291
741,126
176,835
23.9%
Surplus due to underspent contracted services.
FIRE
36,777,552
37,824,590
37,950,294
125,704
0.3%
Surplus due to lower than budgeted dispatch contract costs.
NEIGHBOURHOOD PROGRAMS & SERVICES
8,070,991
8,653,570
8,465,623
(187,947)
-2.2%
Deficit dueto lower than budget rental revenues.
Deficit due to reduced revenues as programs and rentals are negatively
SPORT DIVISION
8,374,109
4,852,648
2,091,990
(2,760,658)
-132.0%
impacted by COVID.
COMMUNITY SERVICES DEPARTMENT TOTAL
57,160,539
55,006,348
52,485,478
(2,520,870)
-4.8%
FINANCIAL SERVICES DEPARTMENT
FINANCIAL SERVICES ADMINISTRATION
312,736
333,999
344,019
10,020
2.9%
ACCOUNTING
1,353,018
1,136,643
1,149,309
12,666
1.1%
ASSET MANAGEMENT & BUSINESS SOLUTIONS
792,117
721,218
727,464
6,246
0.9%
FINANCIAL PLANNING
712,758
1,186,593
1,175,717
(10,876)
-0.9%
REVENUE
329,141
(49,578)
270,931
320,509
118.3%
Surplus due to higher than expected fee revenue.
SUPPLY SERVICES
482,690
412,828
424,589
11,761
2.8%
FINANCIAL SERVICES DEPT TOTAL
3,982,460
3,741,703
4,092,029
350,326
8.6%
CORPORATE SERVICES DEPARTMENT
CORPORATE SERVICES ADMINISTRATION
481,652
547,872
553,663
5,791
1.0%
MAYOR & COUNCIL
1,386,624
1,467,928
1,500,410
32,482
2.2%
CORPORATE COMMUNICATIONS
1,491,405
1,728,529
1,412,195
(316,334)
-22.4%
Deficit dueto substantial decline in adverstising and sponsorship revenue.
EQUITY, ANTI-RACISM & INDIGENOUS
504,471
768,715
774,035
5,320
0.7%
HUMAN RESOURCES
2,325,994
2,538,027
2,518,222
(19,805)
-0.8%
TECHNOLOGY INNOVATION & SERVICES
5,691,723
5,743,026
5,825,241
82,215
1.4%
LEGAL
1,161,494
1,048,116
1,038,565
(9,551)
-0.9%
LEGISLATED SERVICES
1,409,640
1,297,833
1,326,520
28,687
2.2%
CORPORATE SERVICES DEPT TOTAL
14,453,003
15,140,046
14,948,851
(191,195)
2.5%
DEVELOPMENT SERVICES DEPARTMENT
DEVELOPMENT SERVICES ADMINISTRATION
611,537
1,200,533
1,134,926
(65,607)
-5.8%
ECONOMIC DEVELOPMENT
5,988,473
6,008,129
6,028,937
20,808
0.3%
PLANNING
1,087,703
1,278,493
1,682,440
403,947
24.0%
Surplus due to higherthan anticipated revenues for site plans.
Surplus due to higherthan anticipated revenues for site plans and service
ENGINEERING
(593,412)
(722,340)
(56,817)
665,523
1171.3%
charges.
TRANSPORTATION SERVICES
4,513,143
4,502,961
4,557,368
54,407
1.2%
DEVELOPMENT SERVICES DEPT TOTAL
11,607,444
12,267,776
13,346,854
1,079,078
7.6%
INFRASTRUCTURE SERVICES DEPARTMENT
INFRASTRUCTURE SERVICES ADMINISTRATION
639,779
646,731
701,153
54,422
7.8%
Surplus due to reduced utility consumption at facilities during COVID related
FACILITIES MANAGEMENT
13,678,124
14,942,197
15,915,842
973,645
6.1%
closures.
Deficit due to significant winter activity and a major windstorm event in May
which was partially funded by the Weather Stabilization Reserve. There was
PARKS AND CEMETERIES
17,138,588
19,552,308
17,813,957
(1,738,351)
-9.8%
also additional operating costs associated with downtown maintenance and an
increasingly elevated demand for maintenance to playground equipment.
Page 116 of 137
City of Kitchener
Statement of Operations
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended December 31, 2021)
2021 2022 2022 2022 2022
Actual Actual Annual Surplus/ YTD
Budget (Deficit) Variance
OPERATIONS - ROADS AND TRAFFIC
INFRASTRUCTURE SERVICES DEPARTMENT TOTAL
NET DEPARTMENTAL EXPENDITURES
GENERAL EXPENSES
GRANTS & BOARDS
OTHER
GAPPING
CAPITAL AND RESERVE FINANCING
CONTRACT SERVICES
TAX WRITEOFFS & REBATES
PROVISIONS - BAD DEBT ALLOWANCE
EMERGENCY OPERATIONS CENTRE
GENERAL EXPENSES TOTAL
TOTAL NET EXPENSES
GENERAL REVENUES
TAXES
GENERALLEVY
SUPPLEMENTARY TAXES/WRITE-OFFS
LOCAL IMPROVEMENTS
PAYMENTS IN LIEU
OTHER REVENUE
INVESTMENT INCOME
PENALTIES & INTEREST
CONTRIBUTION FROM RERSERVES AND ENTERPRISES
SUNDRY INCOME
SOLAR ROOF
GENERAL REVENUES TOTAL
TOTAL CITY OPERATIONS
Comments
11,654,317 11,948,466 11,913,882 (34,584) -0.3%
43,110,808 47,089,702 46,344,834 (744,868) -1.8%
131,430,997 134,405,289 132,394,297 (2,010,992) 0.6%
15,594,738
15,804,500
15,843,573
39,073
0.2%
1,399,434
1,507,323
1,607,094
99,771
6.2%
(4,426,038)
(3,291,701)
(2,100,000)
1,191,701
56.7% Surplus due to staff savings resulting from COVID in addition to regular
vacancies.
13,624,071
13,899,229
13,896,306
(2,923)
0.0%
931,179
866,189
882,679
16,490
1.9%
62,860
68,413
78,050
9,637
12.3%
752,120
749,813
650,000
(99,813)
-15.4%
1,492,527
812,725
-
(812,725)
-100.0% Deficit due to COVID related expenses.
29,430,891
30,416,491
30,857,702
441,211
-0.5%
-
1,234,927
160,861,888 164,821,780 163,251,999 (1,569,781) 0.4%
(132,046,836)
(137,151,621)
(137,151,611)
10
0.0%
(6,496)
(1,657,002)
(1,050,000)
607,002
57.8% Surplus due to reduced appeals due to delay in MPAC reassessments
(12,275)
(8,418)
(10,180)
(1,762)
-17.3%
(4,575,959)
(4,605,778)
(4,466,200)
139,578
3.1% Surplus due to new properties related to Light Rail Transit being assessed as PILs
(136,641,566)
(143,422,819)
(142,677,991)
744,828
1.1%
(2,427,163)
(4,749,394)
(4,040,000)
709,394
17.6% Surplus due to rapid Bank of Canada rate increases since March 2022.
(4,029,386)
(4,611,445)
(3,358,964)
1,252,481
37.3% Surplus due to increase in overall property tax receivable balances.
(12,515,821)
(12,697,641)
(12,697,641)
-
0.0%
(201,084)
(199,623)
(120,753)
78,870
65.3%
(395,606)
(375,785)
(356,650)
19,135
5.4%
(19,569,060)
(22,633,888)
(20,574,008)
2,059,880
3.1%
(156,210,626)
(166,056,707)
(163,251,999)
2,804,708
1.3%
4,651,262
(1,234,927)
-
1,234,927
Schedule 1
Page 2 of 2
Page 117 of 137
CITY OF KITCHENER
BUILDING ENTERPRISE
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION RESERVE FUND
for the 12 months ended December 31, 2022
(with comparative figures for the 12 months ended December 31, 2021)
STABILIZATION RESERVE FUND
Opening Balance
Transfer from (to) Capital
Net Revenues (Expense) year end only
Interest Revenue (Expense) yearend only
Closing Balance
VARIANCE EXPLANATION:
14,560,318
14,560,318
2022
(625,000)
2021
(625,000)
ACTUAL
BUDGET
VARIANCE * Note
ACTUAL
REVENUE
152,129
13,092,941
13,270,643
(177,702)
Building Revenues
4,578,082
5,036,815
(458,733) 1
6,015,278
4,578,082
5,036,815
(458,733)
6,015,278
EXPENSES
Direct
5,760,319
5,375,121
(385,198) 2
4,293,298
Indirect
1,090,301
1,093,365
3,064
1,017,192
5,714,351
6,468,486
754,135
6,015,278
Net Revenue (Expense)
(1,136,269)
(1,431,671)
295,402
0
STABILIZATION RESERVE FUND
Opening Balance
Transfer from (to) Capital
Net Revenues (Expense) year end only
Interest Revenue (Expense) yearend only
Closing Balance
VARIANCE EXPLANATION:
14,560,318
14,560,318
-
(625,000)
-
(625,000)
(1,136,269)
(1,431,438)
295,169
293,892
141,763
152,129
13,092,941
13,270,643
(177,702)
* Numbers in brackets are unfavourable variances
13,710,996
704,789
144,533
14,560,318
Schedule 2
1 - Revenues are lower than budget due to a decline in the number of new construction builds. Multiple interest rate increases this
year have slowed sales of residential buildings.
2 - Expenses are lower than budget due to staff vacancies.
Page 118 of 137
CITY OF KITCHENER
Opening Balance
(1,040,914) (1,040,914) - (1,032,195)
Add: Net Revenue (Expense)
GOLF ENTERPRISE
Add: Safe Restart Funding carryover
-
Add: Interest Revenue (Expense)
(21,790) (13,129) (8,661) (8,719)
STATEMENT OF REVENUE AND EXPENSES AND
STABILIZATION RESERVE
FUND
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended December 31, 2021)
2022
2021
ACTUAL
BUDGET
VARIANCE * Note
ACTUAL
OPERATIONS
Revenue
2,750,351
2,471,785
278,566 1
2,711,853
Expenses
2,584,329
2,305,110
(279,219) 2
2,575,283
Gross Profit
166,022
166,675
(653)
136,570
Gross Profit Percentage
6%
7%
5%
OTHER EXPENSES
Transfer - Golf Capital Reserve
89,699
89,699
-
87,940
Debt Charges
216,915
216,468
(447)
216,937
Transfer to Capital
248,679
248,679
-
266,000
555,293
554,846
(447)
570,877
Net Profit before Dividend
Dividend Transfer to City
(389,271) (388,171) (1,100) (434,307)
74,821 74,821 74,821
Net Revenue (Expense) (464,092) (462,992) (1,100) (509,128)
Safe Restart Funding 464,092 - 464,092 3 509,128
Overall Net Revenue (Expense) - (462,992) 462,992 -
STABILIZATION RESERVE FUND
Opening Balance
(1,040,914) (1,040,914) - (1,032,195)
Add: Net Revenue (Expense)
(462,992) 462,992
Add: Safe Restart Funding carryover
-
Add: Interest Revenue (Expense)
(21,790) (13,129) (8,661) (8,719)
Closing Balance
(1,062,704) (1,517,035) 454,331 (1,040,914)
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1- Higher than budgeted revenues due to increased fees and sold out memberships.
2 - Expenses are higher than budget resulting from unexpected food and beverage equipment expense due to restart after
lengthy COVID shut down and adjustments to new proshop model.
3 - Safe Restart funds to cover increased expenses during the COVID-19 pandemic were unbudgeted.
Schedule 3
Page 119 of 137
CITY OF KITCHENER
PARKING ENTERPRISE
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION RESERVE FUND
for the 12 months ended December 31, 2022
(with comparative figures for the 12 months ended December 31, 2021)
2022 2021
ACTUAL BUDGET VARIANCE * Note ACTUAL
REVENUE
Parking Revenues 5,028,980 6,363,054 (1,334,074) 1 41091,642
Economic Development Subsidies 1,260,509 1,260,509 - 1,262,750
6,289,489 7,623,563 (1,334,074) 5,354,392
General
4,302,865
4,662,034
359,169 2
8,800,954
Debt Charges
673,610
673,611
1
674,308
Transfer to Capital fund
1,280,788
1,280,788
-
1,362,762
6,257,263
6,616,433
359,170
6,414,827
Net Profit before Dividend
32,226
1,007,130
(974,904)
(1,060,435)
Dividend Transfer to City
2,000,000
2,000,000
-
2,000,000
Net Revenue (Expense) (1,967,774) (992,870) (974,904) (3,060,435
Safe Restart Funding 1,967,774 - 1,967,774 3 3,060,435
-incl Net Revenue (Expense) (0) (992,870) 992,870 -
STABILIZATION RESERVE FUND
Opening Balance
Add: Net Revenue (Expense) year end only
Add: Safe Restart Funding carryover
Add: Interest Revenue (Expense) year end only
Less: Transfer to Capital Reserve Fund
Closing Balance
VARIANCE EXPLANATION:
1,555,952 1,555,952 -
- (992,870) (992,870)
32,571 13,838 (18,733)
1,884,687
(3,060,435)
2,704,000
27,701
1,588,523 576,920 (1,011,603) 1,555,952
* Numbers in brackets are unfavourable variances
1- Revenues are significantly lower due to reduced monthly and hourly parking demands related to new hybrid working
environment. Given the new normal, future projections will need to be revised.
2 - Expenses are lower than budget due salary vacancies as well as security review budgeted, but not used.
3 - Safe Restart funds to cover decreased revenues during the COVID-19 pandemic were unbudgeted.
Schedule 4
Page 120 of 137
CITY OF KITCHENER
WATER UTILITY
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION RESERVE FUND
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended December 31, 2021)
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1 Sales of water were higher than budget due to increased volumes from drier than expected weather.
2 Water supply costs were higher than budget, consistent with increased sales volumes.
3 Administration costs were lower than budget due to higher allocation of costs to capital than anticipated.
4 Water maintenance costs were higher than budget due to increased number of main breaks, as well as increased severity and
cost of repair/restoration.
5 Stabilization reserve is at maximum, so excess is transferred to the capital reserve in accordance with policy.
Schedule 5
Page 121 of 137
2022
2021
ACTUAL
BUDGET
VARIANCE *
Note
ACTUAL
REVENUE AND EXPENSE
Sale of Water
52,110,854
48,633,000
3,477,854
1
49,500,738
Water Supply
26,140,052
24,174,000
(1,966,052)
2
24,465,131
Gross Profit
25,970,802
24,459,000
1,511,802
25,035,607
Gross Profit Percentage
50%
50%
51%
MISCELLANEOUS REVENUE
Other
514,631
494,050
20,581
450,615
514,631
494,050
20,581
450,615
EXPENSE
Administration
2,562,510
2,750,108
187,598
3
2,324,604
Water Maintenance
8,742,088
8,257,187
(484,901)
4
7,552,826
Transfer to capital fund
14,485,927
14,485,000
(927)
14,194,597
25,790,525
25,492,295
(298,230)
24,072,027
Net Revenue (Expense)
694,908
(539,245)
1,234,153
1,414,195
STABILIZATION RESERVE FUND
Opening Balance
7,425,111
7,425,111
-
7,538,584
Add: Net Revenue (Expense)
694,908
(539,245)
1,234,153
1,414,195
Add: Interest Revenue (Expense)
155,431
77,563
77,868
79,467
Less: Transfer to Capital Reserve
(458,822)
(458,822)
5
(1,607,135)
Closing Balance
7,816,628
6,963,429
853,199
7,425,111
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1 Sales of water were higher than budget due to increased volumes from drier than expected weather.
2 Water supply costs were higher than budget, consistent with increased sales volumes.
3 Administration costs were lower than budget due to higher allocation of costs to capital than anticipated.
4 Water maintenance costs were higher than budget due to increased number of main breaks, as well as increased severity and
cost of repair/restoration.
5 Stabilization reserve is at maximum, so excess is transferred to the capital reserve in accordance with policy.
Schedule 5
Page 121 of 137
CITY OF KITCHENER
SANITARY SEWER UTILITY
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION
RESERVE
FUND
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended
December 31,
2021 )
2022
2021
ACTUAL
BUDGET
VARIANCE*
Note
ACTUAL
REVENUE AND EXPENSES
Sewer Surcharge Revenue
65,295,514
60,765,000
4,530,514
1
61,800,728
Cost of Sewage Processing
30,606,958
33,521,000
2,914,042
2
31,168,293
Gross Profit
34,688,556
27,244,000
7,444,556
30,632,435
Gross Profit Percentage
53%
45%
50%
MISCELLANEOUS REVENUE
Other Revenue
1,440,090
1,165,056
275,034
3
868,167
1,440,090
1,165,056
275,034
868,167
EXPENSES
Administration
2,578,417
2,556,078
(22,339)
2,472,977
Sanitary Sewer Maintenance
5,373,217
5,561,872
188,655
4
4,277,951
Sewage Rebates
887,163
851,000
(36,163)
632,475
Transfer to Capital Fund
19,505,012
19,503,000
(2,012)
18,576,760
28,343,809
28,471,950
128,141
25,960,163
Net Revenue (Expense)
7,784,837
(62,894)
7,847,731
5,540,439
STABILIZATION RESERVE FUND
Opening Balance
9,270,109
9,270,109
-
9,348,702
Add: Net Revenue (Expense)
7,784,837
(62,894)
7,847,731
5,540,439
Add: Interest Revenue (Expense)
194,053
95,527
98,526
98,548
Less: Transfer to Capital Reserve
(7,454,672)
(187,992)
(7,266,680)
5
(5,717,580)
Closing Balance
9,794,327
9,114,750
679,577
9,270,109
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1 Sewer surcharge revenue was higher than budget due
to increased water volumes, consistent
with the
water utility
2 Cost of sewage processing was lower than budget, due to a drier spring/summer than
anticipated.
3 Other revenue was higher than budget due to higher than anticipated cross border billing
volumes
4 Sanitary sewer maintenance costs were lower than
budget due to savings
in main and
lateral repairs.
5 Stabilization reserve is at maximum, so excess is transferred
to the capital
reserve in accordance
with policy.
Schedule 6
Page 122 of 137
CITY OF KITCHENER
STORM SEWER UTILITY
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION RESERVE FUND
for the twelve months ended December 31, 2022
(with comparative figures for the twelve months ended December 31, 2021 )
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1 Stormwater fee was higher than budget due to increased development.
2 Admistration expenses were higher than budget due to additional development review costs incurred by the utility.
Schedule 7
Page 123 of 137
2022
2021
ACTUAL
BUDGET
VARIANCE* Note
ACTUAL
REVENUES
Stormwater Fee
23,512,180
23,306,000
206,180 1
21,979,124
Other Revenue
701,572
787,387
(85,815)
665,622
24,213,752
24,093,387
120,365
22,644,746
EXPENSES
Administration
2,650,409
2,471,451
(178,958) 2
2,531,138
Storm Sewer Maintenance
4,382,287
4,302,603
(79,684)
3,911,415
Stormwater Credit Program
631,228
590,589
(40,639)
576,718
Grants to Charities/Places of Worship
517,806
584,000
66,194
503,234
Transfer to Capital Fund
16,043,018
16,044,000
982
14,886,245
24,224,748
23,992,643
(232,105)
22,408,750
Net Revenue (Expense)
(10,996)
100,744
(111,740)
235,996
STABILIZATION RESERVE FUND
Opening Balance
1,028,020
1,028,020
-
783,762
Add: Net Revenue (Expense)
(10,996)
100,744
(111,740)
235,996
Add: Interest Revenue (Expense)
21,520
8,517
13,003
8,262
Closing Balance
1,038,544
1,137,281
(98,737)
1,028,020
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1 Stormwater fee was higher than budget due to increased development.
2 Admistration expenses were higher than budget due to additional development review costs incurred by the utility.
Schedule 7
Page 123 of 137
CITY OF KITCHENER
GASWORKS
STATEMENT OF REVENUE AND EXPENSES AND STABILIZATION RESERVE FUND
for the twelve months ended December 31, 2022
with comparative figures for the twelve months ended December 31, 2021
DELIVERY OPERATIONS
Gas delivery
Revenue
Expense
Gross Profit
Gross Profit Percentage
Other programs
(Dispatch, Rental Water Heaters & Customer Service)
Revenue
Expense
2022
ACTUAL BUDGET VARIANCE * Note
42,526,473 41,290,695 1,235,778 1
18,696,790 18,326,647 (370,143) 2
23,829,683 22,964,048
56% 56%
12,990,089 12,275,824
9,522,132 8,609,190
2021
ACTUAL
38,513,662
16,958,279
865,635 21,555,383
56%
714,265 3 12,353,859
(912,942) 4 8,260,882
3,467,957 3,666,634 (198,677)
4,092,977
Transfer to Gasworks capital fund
(12,988,530)
(12,988,530) -
(10,798,742)
Net Profit before Dividend
14,309,110
13,642,152 666,958
14,849,618
Dividend Transfer to City
(15,536,202)
(15,536,202) -
(15,231,571)
Net Revenue (Expense)
(1,227,092)
(1,894,050) 666,958
(381,953)
STABILIZATION RESERVE FUND
Opening Balance
4,037,715
4,037,715 -
4,373,566
Net Revenue (Expense) year end only
(1,227,092)
(1,894,050) 666,958
(381,953)
Interest Revenue (Expense) year end only
84,521
34,527 49,994
46,102
Closing Balance
2,895,144
2,178,192 716,952
4,037,715
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
1- Gas Delivery sales revenues are higher than budget due to increased gas consumption because of the cold winter (January -March, December).
2 - Gas Delivery expenses are higher than budget due to increased maintenance costs.
3 - Other program revenues are higher than budget due to increase in rental revenues and recoveries from warranty items.
4 - Other program expenses are higher than budget due to increased depreciation costs.
Schedule 8
Page 124 of 137
SUPPLY OPERATIONS
Gas supply
2022 2021
ACTUAL BUDGET VARIANCE * Note ACTUAL
Revenue
40,320,864
33,792,932
6,527,932 5
28,546,577
Expense
37,956,435
35,534,597
(2,421,838) 6
29,232,320
Net Revenue (Expense)
2,364,429
(1,741,665)
4,106,094
(685,743)
Gross Profit Percentage
6%
-5%
-2%
SUPPLY STABILIZATION RESERVE FUND
Opening Balance
3,598,855
3,598,855
-
4,239,902
Net Revenue (Expense) year end only
2,364,429
(1,741,665)
4,106,094
(685,743)
Interest Revenue (Expense) year end only
75,336
34,313
41,023
44,696
Closing Balance
6,038,620
1,891,503
4,147,117
3,598,855
VARIANCE EXPLANATION:
* Numbers in brackets are unfavourable variances
5 - Gas Supply sales revenues are higher than budget due to increased gas consumption because of the cold winter (January -March, December).
6 - Gas Supply expenses are higher than budget due to increased volumes of gas consumed, offset by favourable hedging strategies.
Schedule 8
Page 125 of 137
Investment Report as of December 31, 2022
Comparison of Short Term Yields
January to December 2022
e�,_ PQM e, ,J" ,J�
City Investments
PJC 001 43J OCL
Bank Account Interest
This graph compares the yields for:
1) City investments
2) Interest rate for City bank account with CIBC
Schedule 9 Page 1
Average Short -Term
Investment Balance*
500,000,000
450,000,000
400,000,000
350,000,000
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
2021
* includes average balance in the overnight bank account
Page 126 of 137
Investment Report as of December 31, 2022
Investment Balances
Cash a Short Term Investments
As at September 30, 2022
TYPE
INVESTMENT
BALANCE
PORTFOLIO
SHARE
AVERAGE
YIELD
Government of Canada
0
0.0%
0.00%
Provinces
0
0.0%
0.00%
Municipal/Other
0
0.0%
0.00%
Schedule I Banks
297,143,511
87.4%
2.37%
Schedule II & III Banks
0
0.0%
0.00%
Credit Unions & TrustCo's
43,000,000
12.6%
1.87%
340,143,511
100%
2.31%
Long Term Investments
Provinces
11,523,042
21.1%
2.18%
Municipal/Other
3,555,876
6.5%
3.22%
Schedule I Banks
27,960,797
51.3%
2.04%
Schedule 11 & III Banks
7,013,887
12.9%
2.18%
Credit Unions & Trust Co's
4,500,000
8%
2.00%
54,553,602
100%
2.16%
Schedule 9 Page 2
Operating Fund
Accumulated Interest
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000 ••~•••
1,500,000
1,000,000 '+ ••
R.
500,000 000
• • 1w
• • •�• • • 2021 Actual —41-- 2022 Budget 2022 Actual
Average Interest Rate 2022 = 2.58%
Average Interest Rate 2021 = 1.32%
Page 127 of 137